Purchase Plan Help

[Ditch Leroi]

I am trying to prepare myself for purchasing the first boat. I would greatly appreciate it if you all could look over this plan and adjust add subtract etc.
Thanks. Ditch

Purchase Plan
1. decide it’s the boat (model) for you- research research
2. get other’s opinions about the boat in question
3. Make a balanced overall budget then-make an offer
4. Physically inspect the boat
5. Find out if:
A. it has a clear title
B. it has taxes to be paid
c. What else to lookout for?
d.
6 Make a Purchase Agreement:
Helpful things to include:
a. place deposit money in escrow
b. purchase contingent on survey outcome and positive sea trial
c. What else to lookout for?

7 survey
8 sea trial
9. Payment procedure: Advice here would be helpful, would owners/brokers be willing to take less with cash, is that a bad idea?
a.
b.
c.

10.paper work, fees: this is where I am very confused, it would be great if someone could explain the a-e process below.
A. title procedure:
b. sales tax:
c. registration: USCG
d. boats name change:
e. others ??
11. Transport: Cost out all these and include in the overall budget.
Sea transport:
Overland:
Storage:
a. storing. on the hard, slip, mooring.
b. hauling

[Ditch Leroi]

If I take the boat to a state with no sales tax then does that mean I would pay tax in the sate I bought the boat or not pay taxes at all? For example buy in Florida the keep it in New Hampshire ?
Ditch

[YOGAO]

Lots of posts on sales taxes - do a Google search using the drop down on the top right of any CF page.

The short answer is "No sales tax applies" if NH doesn't have any. The slightly longer one is if you buy the boat in Florida, you currently have 180 days to get it out, or Florida will assess you sales tax.

Fair Winds,
Mike

[nautical62]

If you buy a boat through a seller's broker, they will likely have their standard operating procedures concerning contract, down payment, escrow, etc. The broker will likely send you an offer form/contract. It's your offer, so you will be able to fill in the offer amount and time line between survey/sea trial to acceptance, etc. Make sure this is reasonable, realizing it may take a few days longer to get the survey back than promised.

If it's a boat for sale by owner, you will need to write up your own offer/contract. You will need to decide on an escrow or good faith with potential seller. For me this decision would depend on the amount of money involved. For a pocket cruiser, I've had no problem sending 10% to the seller knowing small claims court would be my likely fall back if the deal fell through and if the seller did not refund the deposit.

Check into insurance, storage options, etc. before you make your offer. Rather than rely on guesstimates here, just call insurance companies and boat yards/marinas you are likely to use and ask. Same with transportation. Get a quote.

In the U.S., local registration is usually handled by your county courthouse, either by the DMV or the office of the registrar. Again, call them to ask what you need. Probably the former registration certificate and title signed over to you by the previous owner as well as proof of the purchase price.

I recommend making a detailed list of things to look through when you look at a boat and force yourself to stick to it. Get the owner/broker off the boat for your inspection even if they are just standing on the dock. Bring a knowledgeable friend who is not as invested in your purchase as you are. It's easy to loose your objectiveness at this stage.

Be prepared to walk away at any stage, even if you've paid for a survey. I did that twice with my last boat search. It's hard, but worth it in the end.

P.S. - I see you have "China" listed as your location. If this is where you are purchasing your boat, the registration and tax issues will likely be different.

[Ditch Leroi]

Good post, thank for the detailed response; very insightful and helpful for me.
Ditch

[osirissail]

Just because a State does not have a sales tax does not mean you will escape paying the equivalent amount of money to the "sale tax" in registering the boat there. Florida for instance had when I purchased my boat - a 6% Sales Tax. For those purchasing their boat in another State that does not have a sales tax and then bringing the boat into Florida to be "registered" had to pay a 6% "Use Tax". Amazing how those numbers matched perfectly. You need to do some "in-depth" research of ALL of the tax consequences of choosing another State than the one you are or will be living in.

[Maren]

I hope this means you have already set your budget and figured out what your expect type of sailing is...

[YOGAO]

I hope Florida is like Maryland in that it only charges the difference in tax rates. When we bought our boat we paid 5% MD sales tax. If we move to and register in FL I would hope to only pay 1%

[Cheechako]

That is my understanding, you will pay the difference only.

[Steve W]

I insisted on the sea trial before scheduling the survey. My thinking was if the diesel ran rough, smoked, was hard to start, ran hot, trans slipped, alternator did not charge, steering and instrument issues and I did not like how it sailed, etc., etc., then I was not out the cost of the haulout and survey. Broker fought me on this for a week or two, but finally gave in and it worked out fine. Surveyor even commented that he thought it was a smart move. BTW, I had made an offer and provided a deposit check before the sea trial, and the deal was contingent on the sea trial and survey.

[YOGAO]

Steve W,

Yep, sounds like both you and your surveyor were smart. Did the surveyor also do any evaluation of the engine for you?

Fair Winds,
Mike

[Ditch Leroi]

Sea trial before survey, that makes good sense to me! Maren here is a sister post that I ran at the same time: http://www.cruisersforum.com/forums/...ats-30953.html
When it comes down to purchase time I will study the whole process of registration and taxes for both states, now I now what to expect and where to look : ) . Thanks for the enlightenment.